NOW CBDT HAS INFORMERS.... WHEN WILL CBEC HAVE ?

CBDT has issued guidelines to reward persons giving information about untraceable assessees who owe huge taxes and money to the Income Tax Department.

As per the new guidelines, any person who provides credible information against a declared IT defaulter would be rewarded 10% of the tax realised from such an entity.  The maximum amount which could be given to an informer has been capped at Rs.15 Lakhs. However a provision has also been kept to enhance this reward in exceptional cases after the approval of CBDT from the competent authority.

The new guidelines have been issued by CBDT keeping in mind the huge challenge of tackling black money in the country and at the same time boosting revenue for the government.

Income tax is a tax collected by the CBDT on the income of an individual and also on corporate income. CBDT is vigilant and has taken this step to tackle black money as well as to enhance the collection of income tax.

CBEC officials always compare with the CBDT about the facilities availed by the counter parts and claim for parity. However, no action or demand has been put forward to tackle the same menace in the area of Service Tax. The income tax is an individual tax whereas Service Tax is a tax that has been collected by the service provider but has not deposited the same with the Govt. A huge amount of Service Tax is being collected by various service tax providers through dubious methods, which is siphoned off without being deposited in the govt. treasury and that too for years together.

Almost two years back, the govt. had introduced the VCES scheme for granting amnesty to service tax dodgers. But this is not the manner in which tax-collected-but-not-deposited-in-govt-account is to be dealt with.

CESA, Mumbai, is constantly demanding to make the Service Tax Rules and procedures simpler like the State VAT and to reduce the influence of third parties like CHA’s in Customs, and presently the Chartered Accountants (CAs) in Service Tax, in the name of facilitation, so that the nexus at the highest level can be curtailed/broken.  This will also result in the increase in the number of tax payers in the ST department, as even an ordinary person can do his business and pay his tax without having to resort to taking the help of a CA/Consultant.

CBEC should also issue guidelines along the lines of CBDT for encouraging informers to provide information on ST defaulters. Definitely, this will positively impact the collection of ST revenue and reduce the quantum of evasion. Hope that the FM will take initiative, encourage the informers to come forward and maintain uniformity in the both the arms of revenue collection.

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